Brent McDaniel, Head of Anti-Bribery & Corruption, KPMG, comments on the Bribery Act guidance, being released this morning.
“The MoJ [Ministry of Justice] guidance must be heeded by UK corporates, but their continuing efforts to combat bribery and corruption [through policy and procedure] will be very dependent upon enforcement actions taken by the SFO in years to come.
“The guidance provides suggestions for good compliance, but precedents will be set, fines doled out, and culture shifted through the decisions made by the SFO and in court. It is clear that the fight against bribery and corruption is high on the SFO agenda, therefore now is the time for any global business, with even a footprint in the UK, to prepare themselves in a proportionate but adequate way.
“We need to cut through the noise created by the corporate hospitality hype and listen to what the guidance is telling us about the Act. The SFO are likely to have little interest in prosecuting over a bottle of wine or a ticket to the Olympics. The mandate is to stamp out grand scale corruption in high risk countries, but doing so with limited resources.
“In these global times, this UK-based law is geographically omnipotent and doesn’t just apply to UK companies doing business overseas. Non-UK companies conducting business in the UK will also be a focus, in an attempt to level the playing field for domestic companies.
A problem shared is not a problem halved for M&A
“This Act is particularly relevant for M&A and PE. In cross territory deals the key is to do your homework and know exactly what you’re buying - due diligence lies at the heart of the Bribery Act. In the eyes of the court if you buy the house the skeletons occupying the cupboard come with it too. Not only will the value of the deal drop if bribery allegations are made but your corporate value will suffer too.
“The same goes for PE. Anti-bribery & corruption culture and behaviours need to permeate through entire portfolios, irrespective of location or intended investment period. Short term investment can bring long term reputational issues if not done right.”
